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Today in Commodities: Dollar in the Driver's Seat

Yes, it seems likely that the next two contract months for UNG will be disappointing, but "all things eventually return to the mean." Natural gas futures will rise -- of course, the only issue is when. At this point with UNG near $11.00, suppose one goes long and it falls to $9.00 within the next few weeks, I suggest that may only be a paper loss of less than 20%, and falling to $9.00 intuitively to me seems unlikely. But, when UNG rises, though probably never getting near its near $65 high of about two years ago, it is not unthinkable that it will provide investors with a very good long-term capital gain from its current level. Yes, I am long UNG and have bought bits and pieces as it has been going down. And yes, I may look up and see the knife falling on me. That's risk/reward.

Australian Dollar Preparing to Break Out

Mr. Patel's articles are often on the money (sorry about pun). After a recent trip to Australia, I came away with a feeling that the world recession has so far has not have a strong of impact on the Austrailian economy as it has in most other countries. As he says, Australia with its abundant natural resources having great exportable valuable is situated to profit from the inevitable rebound in the world economy. Moreover, given the country's relative healthy balance sheet,the Australian dollar is set to rise and likely remain high in comparison to the dollar as it deflates. Yes, this may cause most fiat currencies to in time deflate as well, but in the case of Australia, it will be backed not by gold or services, but by hard assets other than precious metals. Having said this, often when I have been long in a specific currency I have not done particularly well. Thus, I think it might be better to invest in the the equity and investment grade bonds of the the country's strong, commodity based companies to reap the values of both the likely devaluation in the U.S. dollar and foreseeable increase in the Aussie dollar.